Interferons (IFNs) possess potent growth inhibitory effects on tumor cells and there has been significant interest in their use in cancer therapy since their discovery in 1957. At present, IFNs are licensed agents for hematologic, as well as, for solid tumors including multiple myeloma, non-Hodgkins lymphoma, metastatic renal cell carcinoma, cervical cancer, thyroid carcinoma, chronic myelogenous leukemia, metastatic melanoma and Kaposi's sarcoma. However, clinical use of IFNs is severely limited by severe toxicity such as, granulocytopenia, liver toxicity, neurological disorders, fatigue and this has led to the search for alternative strategies that would circumvent toxic effects of IFN therapy by identifying and using transcription factors that can directly activate anti-tumor mechanisms of IFNs. Type I (IFNa/b) and Type II (IFNg) IFNs exert their effects by binding to cognate receptors on target cells and the IFN signal is coupled to gene transcription through activation of Janus kinase (JAK)/signal transducers and activators of transcription (STAT) pathways. Although the two types of IFNs recognize distinct receptors, they have overlapping biological effects stemming from their common dependence on STAT1 for regulation of gene transcription. Immediate targets of activated STAT1 protein are IFN regulatory factors (IRFs) and two IRF members, IRF-1 and IFN consensus sequence binding protein (ICSBP) possess tumor suppressor activities. It is therefore not clear whether anti-tumor effects of IFNs derive from activated STAT1 or these two IFN-inducible IRF tumor suppressors that have also been implicated in several biological effects attributed to IFNs. Our goal in this study was to investigate the potential of IFNg gene therapy in treatment of cancer, such as human epithelial cell carcinomas, malignant pleural mesothelioma and nasopharyngeal carcinoma for which viral oncogenes are the etiologic agents. Specifically, we developed a TR mouse model of SV40-T-Ag-induced lens epithelial cell carcinoma to investigate whether targeting expression of IFNg directly into malignant cells can induce regression of an undifferentiated epithelial cell tumor. The data presented, provide evidence of IFNg-induced regression of the tumor and indicate that STAT1 is not necessary for down-stream actions IFNg but is required mainly for the transactivation of IRF-1 and ICSBP genes. We further show that growth inhibitory and pro-apoptotic effects of IRF-1 and ICSBP are mediated, in part, through transcriptional activation of p21WAF1, p27 and caspase-1 genes. Our results suggest that IFNg gene therapy maybe effective in malignant diseases for which DNA tumor viruses are etiologic agents and that anti-tumor actions of IRF-1/ICSBP can be exploited therapeutically to directly activate anti-tumor mechanisms in malignant cells and thereby circumvent adverse clinical effects associated with IFN therapy.